Paper No. 19
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`WEATHERFORD INTERNATIONAL, LLC;
`WEATHERFORD/LAMB, INC.; WEATHERFORD US, LP; and
`WEATHERFORD ARTIFICIAL LIFT SYSTEMS, LLC
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.,
`Patent Owner
`________________________
`
`Case IPR2016-01517
`Patent 7,134,505
`________________________
`
`PETITIONER’S REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`WEATHERFORD INTERNATIONAL, LLC;
`WEATHERFORD/LAMB, INC.; WEATHERFORD US, LP; and
`WEATHERFORD ARTIFICIAL LIFT SYSTEMS, LLC
`Petitioners
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.,
`Patent Owner
`________________________
`
`Case IPR2016-01517
`Patent 7,134,505
`________________________
`
`PETITIONER’S REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`IPR2016-01517
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Atlanta Gas Light Co., v. Bennett Regulator Guards, Inc., IPR2013-00453, paper
`
`88............................................................................................................................2
`
`Chimei Innolux Corp. v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-
`
`00068, paper 7........................................................................................................3
`
`First Quality Baby Products, LLC v. Kimerly-Clark Worldwide, Inc., IPR2014-
`
`01021, paper 42..................................................................................................2, 3
`
`Innolux Corp. v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-00028,
`
`paper 31..................................................................................................................4
`
`JP Morgan Chase & Co. v. Maxim Integrated Proucts, Inc., CBM2014-00179,
`
`paper 11..................................................................................................................3
`
`Sony Computer Entertainment America LLC v. Game Controller Technology LLC,
`
`IPR2013-00634, paper 31 ......................................................................................4
`
`Symtroleum Corp. v. Neste Oil Oyj, IPR2013-00178, paper 22................................3
`
`Tradestation Group, Inc. v. Trading Technologies International, Inc., CBM2015-
`
`00161, paper 29......................................................................................................3
`
`Other Authorities
`
`PTAB Practice Guide, 77 Fed. Reg. 48756-48773....................................................3
`
`i
`
`
`
`Rules
`
`Rules
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`37 C.F.R. § 42.51(b)(2)(i)..........................................................................................5
`37 C.F.R. § 42.51(b)(2)(i). ....................................................................................... ..5
`
`IPR2016-01517
`
`IPR2016-01517
`
`ii
`
`
`
`IPR2016-01517
`
`I.
`
`INTRODUCTION
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`Patent Owner (“PO”) filed a patent infringement lawsuit against four sets of
`
`Defendants, including Petitioner and Baker Hughes (who are competitors), but PO
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`wants only one Defendant/Baker Hughes to file IPRs. Attempting to strip Petitioner
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`of its right to have its own IPR evidence and grounds of rejection considered,
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`including those citing Yost,1 PO alleges that Petitioner failed to identify Baker
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`Hughes as a real party in interest (RPI). PO has failed to rebut the presumption that
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`Petitioner correctly identified all RPIs. Baker Hughes is not an RPI to the present
`
`proceeding, a fact PO was made aware of in the co-pending litigation prior to the
`
`filing of the Patent Owner Preliminary Response (POPR). Indeed, from the outset
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`of the litigation, all Defendants agreed that they would act independently in IPRs,
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`which is precisely what has happened. Baker Hughes has exerted no control over
`
`Petitioner
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`in the IPRs (and vice versa). Nor has Baker Hughes had the
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`“opportunity” to exert any such control (and vice versa).
`
`II.
`
`PATENT OWNER HAS FAILED TO REBUT THE PRESUMPTION
`THAT PETITIONER CORRECTLY IDENTIFIED THE RPI
`
`The Board’s practice to “initially accept[] the identification of real parties in
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`1 Yost negates PO’s position in Baker Hughes’ IPRs that it was not known to
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`perform multistage fracturing of horizontal open hole wells using packers for zonal
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`isolation and ported sliding sleeves for injecting fracturing fluids.
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`1
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`
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`IPR2016-01517
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`interest in a petition as accurate acts as a rebuttable presumption.… The party
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`against whom a presumption is directed has the burden of producing evidence to
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`rebut the presumption.” IPR2013-00453, paper 88 at 7-8 (emphasis added). Thus,
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`PO has the initial burden of rebutting Petitioner’s identification of the RPIs with
`
`sufficient evidence that brings into question the accuracy of the identified RPIs. Id.
`
`at 8; see also IPR2014-01021, paper 42, p. 7. PO has failed to meet this burden.
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`All that PO has alleged in the POPR is that: 1) Baker Hughes is a joint
`
`defense partner with Petitioner in the litigation (POPR at 10); 2) Petitioner
`
`allowed Baker Hughes to obtain discovery on its behalf in the litigation (POPR at
`
`3); 3) Baker Hughes participated in drafting invalidity contentions in the litigation
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`(POPR at 2-5, 10, 11)2; 4) Baker Hughes filed its own separate IPR petitions
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`using similar art, but not Petitioner’s Yost reference (POPR at 3, 5, 11); and 5)
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`Baker Hughes and Petitioner pursued separate summary judgment theories in the
`
`litigation (POPR at 11-12). In other words, all of PO’s evidence is directed to
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`actions taken as part of a joint defense group in the litigation, or Baker Hughes’
`
`separately filed IPR petitions in which Petitioners had no involvement.
`
`Participation in a joint defense group and other actions taken in a co-pending
`
`litigation do not provide a connection to the present proceeding sufficient to show
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`2 Contrary to PO’s argument based on PDF metadata, Petitioner’s litigation counsel
`
`drafted the Yost-based invalidity contentions as well as other contentions.
`
`2
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`
`
`IPR2016-01517
`
`Baker Hughes is an RPI. See, e.g., IPR2014-01021, paper 42 at 8; see also, e.g.,
`
`IPR2013-00178, paper 22 at 7 (co-defendants and shared counsel insufficient);
`
`Practice Guide 48,760 (participation in joint defense group insufficient); IPR2013-
`
`00068, paper 7 at 9-10 (joint actions taken in a litigation insufficient). Baker
`
`Hughes’ separately filed and substantively different IPR petitions show no
`
`connection to the present proceeding. See, e.g., CBM2015-00161, paper 29 at 29-
`
`30 (even substantially copying an earlier filed petition is insufficient); see also
`
`CBM2014-00179, paper 11 at 6–13 (substantial resubmission of a petition
`
`prepared by another party is insufficient). Accordingly, PO has failed to show a
`
`specific connection between Baker Hughes and Petitioner with regard to the
`
`Petition in the present proceeding, and therefore, has failed to rebut
`
`the
`
`presumption that the identified RPI is correct.
`
`III. BAKER HUGHES IS NOT AN RPI
`
`Notwithstanding PO’s failure to rebut
`
`the RPI presumption, Petitioner
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`nevertheless provides the following evidence that Baker Hughes is, in fact, not an
`
`RPI. While there is no bright line test, the Board has recognized the following
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`factors when evaluating RPI issues: 1) whether a non-party funds, directs and/or
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`controls the IPR; 2) the non-party’s relationship with the petitioner; 3) the
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`nonparty’s relationship to the petition itself, including the nature and/or degree of
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`involvement; and 4) the nature of the entity filing the petition. See, e.g., IPR2013-
`
`3
`
`
`
`IPR2016-01517
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`00634, paper 31 at 6.
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`First, Petitioner (recognizing its duty of candor3) asserts that Baker Hughes
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`did not provide any funding for filing or attorneys/expert fees in the present
`
`proceeding.
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`Second, Petitioner previously represented to the court in the litigation that
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`“Defendants have operated independently with regard to IPRs. Weatherford
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`decided to file its IPRs when it did on a completely independent basis, with no
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`consultation or agreement – explicit or implicit – with Baker Hughes or Peak.”
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`Exhibit 1028 at 4. Indeed, Baker Hughes did not direct or control the filing of the
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`petition in the present proceeding, and had no degree of involvement in the filing,
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`a fact PO was aware of prior to the POPR.
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`Third, as illustrated in the unredacted portions of the litigation Joint
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`Defense Agreement submitted herewith (Exhibit 1029 at 10), Petitioner and Baker
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`Hughes expressly agreed not to “cooperat[e]” in “post-grant proceedings before
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`the Patent Office,
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`including the Patent Trials and Appeals Board (e.g.,
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`3 When there is a disagreement over the level of the relationship between a
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`Petitioner and third party based on allegations of control or funding without actual
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`evidence of such, the Board has relied on Petitioner’s duty of candor to resolve the
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`issue. See, e.g., IPR2013-00028, paper 31, page 4. This is a reasonable approach
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`where, as here, Petitioner is asked to prove a negative, i.e., someone is not an RPI.
`
`4
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`
`
`IPR2016-01517
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`reexamination or inter partes review),” explicitly stating that “each party avers
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`that it will not exercise direction and control over any such proceeding filed by a
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`different party.” Id. This language even forecloses the “opportunity” for Baker
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`Hughes to have any control over Petitioner’s IPRs. Put simply, there is no
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`relationship between Baker Hughes and Petitioner in the present proceeding.
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`Fourth, recognizing its duty of candor and without waiving any privilege,
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`Petitioner answers the “Requests for Admission” (RFAs) sought by PO.4 With
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`regard to RFA 1, Petitioner admits notifying Baker Hughes (as well as PO and the
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`court) that it “might” file IPRs. Of course, this means nothing about whether
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`Baker Hughes is an RPI—it is no big secret that a patent defendant “might” file an
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`IPR. Petitioner denies RFAs 2-6. Again, there is no relationship between Baker
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`Hughes and Petitioner with regard to the present proceeding or any IPRs.
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`IV. CONCLUSION
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`In light of the above, Petitioner requests that the Board reject PO’s argument
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`that the Petition is deficient for failing to identify Baker Hughes as an RPI.
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`Dated: December 19, 2016
`
`Respectfully submitted,
`/Jason Shapiro/
`Jason Shapiro, Counsel for Petitioners
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`4 See, Exhibit 1030 at 3-6. Such RFAs are inappropriate in this IPR because they
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`are not “in the interest of justice.” 37 C.F.R. § 42.51(b)(2)(i). PO also served
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`RFAs in the litigation but the case was stayed before the response deadline.
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`5
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`
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`IPR2016-01517
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`CERTIFICATE OF SERVICE
`
`I certify that
`
`the foregoing PETITIONER’S REPLY TO PATENT
`
`OWNER’S
`
`PRELIMINARY RESPONSE,
`
`accompanying EXHIBITS,
`
`MOTION TO SEAL, PROPOSED PROTECTIVE ORDER, UPDATED
`
`EXHIBIT LIST and the current CERTIFCATE OF SERVICE were served
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`December 19, 2016 via electronic mail, as previously consented to by Patent
`
`Owner, upon the following counsel of record:
`
`HAMAD M. HAMAD (LEAD COUNSEL)
`BRADLEY W. CALDWELL (BACK-UP COUNSEL)
`JUSTIN NEMUNAITIS (BACK-UP COUNSEL)
`CALDWELL CASSADY CURRY P.C.
`
`hhamad@caldwellcc.com
`bcaldwell@caldwellcc.com
`jnemunaitis@caldwellcc.com
`
`DR. GREGORY J. GONSALVES (BACK-UP COUNSEL)
`GONSALVES LAW FIRM
`
`gonsalves@gonsalveslawfirm.com
`
`Dated: December 19, 2016
`EDELL, SHAPIRO & FINNAN, LLC
`9801 Washingtonian Blvd., Suite 750
`Gaithersburg, MD 20878
`
`Respectfully submitted:
`/Jason Shapiro/
`Jason Shapiro, Reg. No. 35,354
`Counsel for Petitioners
`Telephone: 301.424.3640
`Customer No. 27896
`
`6
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